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REGULATION (EEC) No 4064/89 MERGER PROCEDURE

Article 6(1)(b) NON-OPPOSITION Date: 18/10/2000

Also available in the CELEX database Document No 300M2061

Office for Official Publications of the European Communities L-2985 Luxembourg

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 18.10.2000 SG(2000)D/107579

PUBLIC VERSION

MERGER PROCEDURE ARTICLE 6(1)(b) DECISION

To the notifying parties

Dear Sirs,

I THE PARTIES

Case M.1745 – EADS.

Case M.1438 – British Aerospace/GEC Marconi.

Rue de la Loi 200, B-1049 Bruxelles/Wetstraat 200, B-1049 Brussel - Belgium Telephone: exchange 299.11.11 Telex: COMEU B 21877. Telegraphic address: COMEUR Brussels.

II THE OPERATION

III. CONCENTRATION

IV. COMMUNITY DIMENSION

8.The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 billion in 1999. Each of the undertakings concerned had a Community-wide turnover in excess of EUR 250 million. Each of the undertakings concerned did not achieve more than two-thirds of their aggregate Community-wide turnover within one and the same Member-State. The notified operation therefore has a Community dimension.

Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission Notice on the calculation of turnover (OJ C66, 2.3.1998, p25). To the extent that figures include turnover for the period before 1.1.1999, they are calculated on the basis of average ECU exchange rates and translated into EUR on a one-for-one basis.

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V. RELEVANT MARKETS

RELEVANT PRODUCT MARKETS

9.The relevant product markets that form part of the transaction are : (i) large commercial aircraft, (ii) cabin conversion, (iii) aerospace components, (iv) military transport aircraft, and (v) production of new cargo aircraft.

10.The market for large commercial aircraft refers to the design, development, certification and production of aircraft in the 100-plus seat class. In general, large airliners can be subdivided into single-aisle and twin-aisle body segments.

11.The cabin conversion market covers the installation, removal and alteration of cabin components of passenger aircraft currently in service.

12.The market for aircraft components comprises the design, manufacture and assembly of a wide range of aircraft components. Each type of component can be regarded as a separate product market due to the high degree of specialisation on both the supply and the demand side.

13.Military transport aircraft are ordered by Ministries of Defence to perform strategic and operational airlift missions.

14.Two segments could be distinguished in the market for cargo aircraft : (i) new cargo aircraft production and (ii) passenger-to-cargo aircraft conversion.

15.However, for the purposes of this decision, it is not necessary to further delineate the relevant product markets in the above sectors, as in all alternative market definitions considered effective competition would not be significantly impeded in the EEA or in any substantial part of it.

RELEVANT GEOGRAPHIC MARKETS

16.The Commission has already defined the market for large commercial aircraft as world-wide in previous cases. The military transport aircraft market has been traditionally considered as national where a national supplier exists. On the other hand, subject to other barriers such as export restrictions or barriers connected with national security, where there is no domestic supplier, competition takes place world-wide among suppliers of different countries. All other markets referred to under the relevant markets' definition are world-wide in scope.

VI. COMPETITIVE ASSESMENT

Case M.877 – Boeing/McDonnell Douglas, Case M.1745 – EADS.

Case M.1745 – EADS.

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21.For the above reasons, it appears that the notified operation does not create or strengthen a dominant position in any of the relevant markets, as a result of which effective competition would be significantly impeded in the EEA or any substantial part thereof.

VII. CONCLUSION

22.Therefore, the Commission has decided not to oppose the notified operation and to declare it compatible with the common market and with the functioning of the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of Council Regulation (EEC) No. 4064/89.

For the Commission,

Mario MONTI Member of the Commission

6 Case M.1745 – EADS.

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